11.6 - 11/06/07 Explaining Choices About Money Monetary...

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11/06/07 Explaining Choices About Money Monetary Cooperation is Hard *harder than any other cooperation, also of utmost importance -Complexity -unique challenges posed due to complexity -even if all states agree that cooperation is best in theory, it is next to impossible to agree on means to cooperation -boils down to liberalization -who is going to liberalize, and by how much? -different styles of monetary regimes have distinct distributional consequences -exchange stability vs. domestic autonomy vs. escape clauses etc -technical disagreements -difficult to monitor disagreements -many aspects of international monetary systems are very hard to regulate -The Crucial Adjustment Problem -fundamental problem of monetary affairs -abrogation of regulation to national macroeconomic policy -give up to the government the ability to self regulate economy -links domestic and international spheres of economy -international agreements tend to be fragile -everybody gains from cooperation, but to adhere to these agreements, governments often need to take measures that hurt -tend to arise at the worst times -deflation during recession -sacrifice of some power to outside states
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11.6 - 11/06/07 Explaining Choices About Money Monetary...

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